With 25.6 million sq ft of gross leasing in 2024, industrial & warehousing demand across the top five cities remained healthy, witnessing a marginal 2 per cent YoY growth. Although, there was a noticeable dip in leasing activity during the last quarter, strong space uptake in the earlier quarters ensured steady leasing levels during 2024. During the year, Delhi NCR led the demand with 26 per cent share, closely followed by Chennai at 23 per cent share. On a quarterly basis, Q4 2024 saw about 5.5 million sq ft of industrial & warehousing demand across the top five cities. Pune, closely followed by Bengaluru, cumulatively accounted for over half of the quarterly demand.

While Third Party Logistics (3PL) players drove overall demand during the year, and accounted for 33 per cent share in overall leasing, demand from Engineering and Electronics segments gained traction. At a micro market level, Bhiwandi in Mumbai led the leasing activity in 2024 with about 4.5 million sq ft of demand, followed by Chakan-Talegaon in Pune and Oragadam in Chennai. Both micro markets contributed to more than 2.5 million sq ft of demand each in their respective cities.

With 22% YoY rise, 2024 saw over 28 million sq ft of new supply, highest in the recent years, indicating improved developer confidence and an optimistic outlook for the next year. Amidst significant demand rentals in key micro markets rose by 5-10 per cent. Overall vacancy levels at the end of 2024 remained rangebound at around 13-14 per cent.

“While 3PL players continued to dominate demand during 2024 with 33 per cent share in overall leasing, the share has been stabilizing over the last few quarters. Concurrently, space uptake by occupiers from other demand segments continued to pick pace. Engineering and Electronics segments cumulatively accounted for almost one-third of the annual warehousing space uptake in 2024, significantly up from their combined one-fourth demand share in 2023. Moreover, with the rise of Q-commerce, demand from segments like FMCG and Retail are seeing an uptick and are poised for long-term growth across major urban centers.” says Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India.

3PL occupiers drove large-sized deals across cities During the year 2024, large deals (? 200,000 sq ft) accounted for about 40 per cent of the overall demand. While, with 35 per cent share, 3PL players continued to account for majority of the large ticket transactions. Engineering segment also contributed significantly with about 20 per cent share in large-sized deals. Interestingly, in the Electronics segment, the quantum of large deals rose significantly, ~4.5X times in 2024 as compared to 2023. At the city level, space uptake from large-sized deals was highest in Delhi NCR during 2024.